New York Securities Fraud Lawyers Blog
FINRA barred financial advisor Dawn Bennet, from Chevy Chase, Maryland was reportedly convicted for misappropriating client funds in a multimillion-dollar Ponzi Scheme that targeted elderly and financially unsophisticated investors. A Ponzi Scheme is a type of investment fraud that solicits investor money for non-existing investments. Between, December 2014 and July 2017, Ms. Bennett allegedly raised 20 million dollars from 46 investors through the unregistered offer of securities in her retail sports apparel business, DJB Holdings LLC, (“DJ Bennet”). This past Wednesday, a jury convicted Ms. Bennett on all 17 federal charges including securities fraud, wire fraud, and bank fraud, according to the United States Attorney’s Office, District of Maryland. Ms. Bennet’s alleged Ponzi Scheme received heavy media attention after the FBI found evidence suggesting that she casted “hoodoo” spells intended to silence SEC investigators.
Dawn Bennett (CRD#1567051) worked as a FINRA registered broker and investment adviser before getting barred by the self-regulatory agency, according to her BrokerCheck records. Within her 28 years in the securities industry, Dawn Bennett was registered with Wheat, First Securities, Inc. (03/1987-08/1996), Legg Mason Wood Walker, Inc. (08/1996-02/2006), CitiGroup Global Markets Inc. (02/2006), Royal Alliance Associates, Inc. (02/2006-10/2009), and Western International Securities, Inc. (10/2009-12/2015). FINRA barred Ms. Bennett from the industry after failing to show up to an administrative hearing.
The Securities and Exchange Commission also charged Dawn Bennett for violating federal securities laws in connection with her alleged Ponzi Scheme. A SEC amended complaint filed last year also lists her business’ CFO, Bradley Mascho, from Frederick, Maryland in addition to Dawn Bennett and her entity DBJ Holdings, LLC. A few months ago, Mr. Mascho pled guilty to charges in a plea bargain that capped his maximum prison term at ten years.
Dawn Bennett reportedly told her alleged Ponzi Scheme victims that their funds would go towards convertible or promissory notes funding her business, DJ Bennett. In turn, investors were allegedly promised an annual interest rate of 15% and guaranteed protection of savings. Instead, Ms. Bennett is said to have used new deposits to pay falsified returns to existing investors and fund a lavish lifestyle as common in Ponzi Schemes. Undoubtedly, Ms. Bennet appeared to be living large spending six-figure sums on astrological gems, cosmetic medical procedures, and an annual lease for a luxury suite at the Dallas Cowboys’ home stadium. Furthermore, Ms. Bennett even purportedly allocated investor funds towards paying Hindu priests to ward off her investigators, according to a website operator.
Some of the most vulnerable investors appear to have been targeted victims of Dawn Bennett’s alleged Ponzi Scheme. Many of the investors were elderly investors who lost their entire life savings and retirement funds, according to U.S attorney, Robert K. Hur. Dawn Bennett gained the trust of many investors who listened to her previously hosted radio show. Our investment fraud attorneys encourage seniors to know the five red flags of investment fraud listed in a Securities and Exchange Commission alert. The red flags include promises of high returns like 15% with little or no risk; unregistered persons, flawed financial professional background; pressure to buy quick and free meal investment seminars. Securities fraud attorneys warn that investors should look out for any of these signs through using resources such as the Investment Advisor Public Disclosure Online Database.
Soon, Dawn Bennett will be officially sentenced and suffer the consequences of running her alleged Ponzi Scheme. Nevertheless, Ponzi Schemes continue to take money from innocent investors at an alarming rate lately, with the recent alleged $345 million Ponzi Scheme shut down by the SEC. Our NYC based securities attorneys have ample experience from successfully representing investor clients nationwide in cases involving Ponzi Schemes. Contact our securities fraud attorneys for help recovering losses if you find yourself to be a victim of a Ponzi Scheme or any other investment fraud.